Honda Motor on Wednesday predicted it would beat this year's record car sales in 2008, and said it would step up its research and development functions.
TOKYO: Honda Motor on Wednesday predicted it would beat this year's record car sales in 2008, and said it would step up its research and development functions by building a dedicated facility for its premium Acura brand.
This year, Japan''s second-biggest automaker increased its global sales by 6 percent to an estimated 3.762 million cars as it grew in all regions except the shrinking domestic market.
Expansion was especially brisk in the emerging markets of China and South America but Honda, along with domestic rival Toyota Motor Corp, also charged ahead in the mature U.S. and European markets to grab a bigger slice of the pie.
At a news conference to sum up 2007 and provide an outlook for next year, Chief Executive Takeo Fukui said he expected Honda's car sales to continue growing in 2008, including in the tough Japanese market with the roll-out of four new products.
It launched three cars in Japan this year, including the Accord-based Inspire sedan unveiled on Wednesday.
"Sales will grow in all regions, so (global sales) will rise again," Fukui said.
In the crucial U.S. market, where industry watchers and executives have grown increasingly downbeat due to the subprime loan fallout, Honda aims to sell 1.59 million vehicles next year, up 3 percent from the 2007 estimate of 1.55 million.
"We've set our forecast at a cautious level," Executive Vice President Koichi Kondo said, predicting the total U.S. market would inch down to 15.9-16.0 million vehicles in 2008 from around 16.1-16.2 million this year.
He added that while sales of the Fit subcompact and new Accord were robust, light trucks such as the Pilot SUV and cars in the Acura line were struggling.
To strengthen the Acura brand, Honda said it would construct a facility solely for its cars at a planned new R&D centre north of Tokyo.
The company separated the product development functions for the Honda and Acura brands last year, but the latest move would allow it to define the two brands' characteristics more clearly and accelerate development, Honda said.
Investment for the R&D centre, including test courses, would come to 48 billion yen ($420 million). Operations will begin in 2009.
TURNING POINT
JPMorgan analyst Takaki Nakanishi said 2008 would mark a turning point for Honda as its long-term growth potential is reassessed favourably.
"Honda is poised to embark on a new growth phase as it secures the production capacity to enable volume growth, introduces new hybrid and super-clean diesel technology, generates growth in emerging nations and in its premium brand, and reinforces its new production structures," he wrote in a recent report.
Honda said it would strengthen its hybrid line-up by adding a new sports car based on the CR-Z concept introduced at this year's Tokyo Motor Show globally. With a planned new hybrid-only compact car coming out in 2009, Honda said it expects about one-tenth of its global car sales to be powered by the gasoline-electric hybrid system by around 2010.
"Up until now, the hybrid race was more about the image and not so much a business proposition," Fukui said.
"The real competition starts now," he said, adding that Honda's newly developed lightweight and compact hybrid system would slash costs and allow drivers to offset the vehicles' price premium in one or two years with improved mileage.
Honda has set a goal of selling at least 4.5 million cars in 2010. A new mid-term business plan to replace the one ending in March 2008 would be announced in the middle of next year, Fukui said.
For 2008, Honda forecast European sales of 420,000 cars, up 11 percent from a record 380,000 estimated for this year. In China, it aims to expand sales by 17 percent to 490,000 cars from an estimated 420,000 this year.
Asia-Pacific sales, excluding China and Japan, are forecast to jump 20 percent to 415,000 cars next year, from 345,000. In 2007, global motorcycle sales climbed 6 percent to a record 13.38 million units, Honda said.
After a 30 percent spike in South American car sales in 2007, Honda will add another 20,000 units of annual capacity at a Brazilian factory next August after almost doubling capacity to 100,000 this year, it said.
Honda's shares ended flat at 3,690 yen after the news, bucking a fall in other auto stocks.
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